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Jasper Company produces a product that is sold for $40 per unit. The company produced and sold 6,000 units during June 2013. There were
Jasper Company produces a product that is sold for $40 per unit. The company produced and sold 6,000 units during June 2013. There were no beginning or ending inventories. Variable and fixed costs follow. Variable Costs per Unit Fixed Costs per Month Manufacturing: Direct materials Manufacturing overhead..... Selling and administrative.. $40,000 20,000 $10 Direct labor.... 2 Total. $60,000 Manufacturing overhead...... Selling and administrative... $17 5 ..... Total.... $22 Required a. Prepare a contribution income statement for June. b. Prepare a cost-volume-profit graph. Label the horizontal axis in units with a maximum value of 10,000. Label the vertical axis in dollars with a maximum value of S400,000. Draw a verti- cal line on the graph for the current (6,000) unit sales level, and label total variable costs, total fixed costs, and total profits at 6,000 units. 5
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